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Santa Rosa company buys bankrupt Cosentino Winery


Vintage Wine Estates in Santa Rosa continues to expand, scooping up a Napa Valley winery that collapsed into bankruptcy last fall.

The Santa Rosa company purchased Cosentino Winery near Yountville, giving it a prime location along Highway 29 in Napa Valley.

The purchase price was not disclosed, but people familiar with the deal said it was between $8 million to $9 million.

Vintage Wine Estates is owned by a small group of investors who are bucking the trend of the down market, when many wineries are downsizing or looking to sell assets due to weakened demand for high-end wines.

"I think the market is going to be tough for another year or two," said Pat Roney, president of Vintage Wine Estates. "But we're still looking to expand. There are opportunities."

Cosentino Winery becomes the company's third winery facility and its eighth wine brand, joining Sonoma Coast Vineyards, Stonefly Vineyards and Windsor Vineyards. It also has winemaking facilities at Girard Winery in Yountville and Grove Street Winery in Healdsburg.

The company plans to build a fourth winery, Windsor Sonoma Winery, on Westside Road next year.

Vintage Wine Estates specializes in direct-to-consumer wine sales and purchases most of its grapes from growers to produce its estimated 500,000 cases annually. It has remained financially healthy by focusing on value, Roney said.

Cosentino Winery, which was founded in 1980, began running into financial problems in 2008, according to people familiar with the situation. The company's debt blossomed, and it filed for bankruptcy and closed the winery in November.

Vintage Wine Estates purchased the winery and most of its assets including inventory and some equipment on Dec. 30 from Cosentino's former lender, Physicians Reciprocal Insurers. Some of the wine inventory remains encumbered with about $800,000 in liens filed by growers, Roney said.

"We'll spend the next two or three months trying to unravel it," he said.

But the company is moving quickly to re-open the winery by the end of January.

"The strongest component you can have with the direct-to-consumers model is a traditional brick and mortar winery," Roney said. "That's why we bought Cosentino."

Vintage Wine Estates was formed in January 2009 by Roney, Leslie Rudd, Michael Stewart and Chuck Sweeney.

Rudd is an alcohol-distribution veteran who also co-founded Lonestar Steakhouse in the 1980s and purchased the high-end grocery Dean & Deluca in 1996.

Stewart purchased a Napa vineyard in 2000 after re-locating from Texas, where he had founded and operated a tech company, Texas Micro, for 25 years. Sweeney is a hotel industry pioneer, founding Embassy Suites Hotels and several resorts in Hawaii. He also owns Vine Cliff Winery in Napa Valley.

Mitch Cosentino, who founded the Napa Valley winery that bears his name, will be retained as a consultant and brand ambassador.

"I still have a lot of close ties to the consumer base," Cosentino said. "It's my namesake."

The winemaker sold off his majority ownership in the winery in the late 1990s, but remained a partial owner and its head winemaker until it closed last year.

The Napa Valley winery became over-leveraged with debt as it tried to expand following a 2005 public stock offering, Cosentino said.

"The company ended up being too leveraged at the wrong time." he said. "Sales weren't the problem."

The Cosentino facility is licensed to produce about 13,000 cases a year, he said.

Vintage Estate Wines is still in expansion mode, with plans to purchase another wine brand or two, Roney said.

"There are tough times in the industry today," Roney said. "But long term, it's going to be a good place to be."